Microsoft blasts Google, joins EU probe

Ex-Microsoft antitrust critic says software giant may have case

KimHjelmgaard

SAN FRANCISCO (MarketWatch) — Microsoft Corp has formally joined the European Union’s investigation of Google Inc., ratcheting up its support for the antitrust probe with a barrage of allegations in an escalation of the rivalry between the tech giants.

In a March 30 blog post, Microsoft
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General Counsel Brad Smith charged that Google
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has put in “technical measures” that prevent Windows-based phones from working properly with YouTube, the popular video site owned by Google.

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He also alleged that Google has even restricted the access of its own advertising customers to their own data.

“Google has engaged in a broadening pattern of walling off access to content and data that competitors need to provide search results to customers and to attract advertisers,” Smith said.

In a statement, Google said, “We’re not surprised that Microsoft has done this, since one of their subsidiaries was one of the original complainants. For our part, we continue to discuss the case with the European Commission and we’re happy to explain to anyone how our business works.”

The European Commission is the arm of the EU charged with overseeing economic and business competition.

But in an ironic twist, a prominent Silicon Valley attorney who led the antitrust legal battles against Microsoft in the 1990s said the Redmond, Wash.-based software giant may have a case.

“I have to say that if this stuff is true, these are very serious allegations,” Gary Reback said in a phone interview. “I would expect, in Europe at least, for these complaints to get some very heavy traction.”

Smith, Microsoft’s general counsel, also noted the irony in the company’s move, saying, “Having spent more than a decade wearing the shoe on the other foot with the European Commission, the filing of a formal antitrust complaint is not something we take lightly.”

Reback echoed that view, saying, “I think Microsoft is doing what you’re supposed to do to make sure that you have a level playing field.”

Reback helped lead the antitrust over Microsoft’s dominant position in the PC software market. He is also involved in an alliance, which includes Microsoft, that has opposed to Google’s bid to scan vast quantities of books and make them available online.

Joining the fight

In his blog post, Smith said Microsoft had “decided to join a large and growing number of companies registering their concerns about the European search market.”

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“By the European Commission’s own reckoning,” Smith said, “Google has about 95 percent of the search market in Europe. This contrasts with the United States, where Microsoft serves about a quarter of Americans’ search needs either directly through Bing or through our partnership with Yahoo
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”

Smith also cited the “large amounts of data” that advertisers put into Google’s ad servers “in the course of managing their advertising campaigns.”

“This data belongs to the advertisers: it reflects their decisions about their own business,” Smith wrote. “But Google contractually prohibits advertisers from using their data in an interoperable way with other search advertising platforms, such as Microsoft’s adCenter.”

Smith also said Microsoft shares in “the concerns expressed by many others that Google discriminates against would-be competitors by making it more costly for them to attain prominent placement for their advertisements.”

He said his company “has provided the Commission with a considerable body of expert analysis concerning how search engine algorithms work and the competitive significance of promoting or demoting various advertisements.”

The European Commission “takes note of the complaint and, as is the procedure, will inform Google and will ask for its views on it. No further information will be given,” said Amelia Torres, a spokeswoman for the commission.

The European Commission began its investigation into Google’s online business practices in November last year.

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